{+++} For the day the SPX/DOW were -2.15%, and the NDX/NAZ were -2.45%. Bonds gained 22 ticks, Crude slid 80 cents, Gold rallied $12, and the USD was lower. Short term support is now at the 1699 and 1680 levels, with resistance at SPX 1746 and 1768. There is not a ton of support bow until the 200 day moving average, but that doesn’t preclude a dead cat bounce as we are very short term oversold.
Today was a good old fashioned ass whooping. It was a straight down day with nary a bounce. This is called a trend day in the business. The baby, the bath water and the piano player were all thrown out. Risk off. Period.
The SPX is now down about 110 handles from the highs. That’s about 5.5-6%. Another 3-4% could come easy and fast. If that happens, we buy everything with reckless abandon because the rally will be uber powerful to the upside. I hope that capitulation happens over the next couple of days, but it may not. Maybe we grind a little or go higher tomorrow. Were very oversold.
For my money I would like to see a move down to 1700. By the way, the Dow Jones was the first of the indexes to break and close below its 200 day moving average. That’s pretty bearish. The Russell 2000 was also down over 3%. You don’t see that everyday.
You never know where a bottom is until the next day right? Certainly I will regret not having gone deeply long at today’s close if we rip higher at the open tomorrow. I will be pleased if we go lower at the open.
I do think patience is prudent here, as this sell off has teeth.
I am about 75% cash and I still managed to lose money today because everything got crushed.
See you in the trading room. We are close to a bottom.